And with that as the introduction and background, I’d like to proceed to the panel to ask them each to take as much time as they want (as long as its under 5 minutes) to address these 2 questions:1. What do you think are the leading changes occurring in the CPU/early phase research environment? 2. What are the most pressing pressures that will impact the future of this environment?
What is patent cliffGlobal blockbusters by revenue& patent expirationGlobal drug sales at risk from patent expirationFall down of companys annual revenueKey drugs in pipelineFrequency of NME approvals may come downBig pharma job cuts announced since 2009FLOW OF PRESENTATION
Increasing merges &acquisitionsHatch-waxman act-1984Patent exclusivity & generic entry regulationsGenerics will dominate the marketENTERING “pharmering markets”Patent warsContd..
It is most often described as an industry-wideexpiration of the patents of a number ofblockbuster drugs with a combined of $250 billionin annual sales will go off-patent by 2015, creatinga life-threatening situation for many of the topcompanies in pharma sectorWHAT IS PATENT CLIFFSource : Evaluate Pharma,2012
Other sectors, such as software and consumergoods, have patents. But they rely on rapidinnovation to maintain sales.In pharmaceuticals, stringent regulations onauthorization and marketing impose tightercontrols, higher costs and longer lead times,making drug developers more reliant on patentmonopolies to recoup their costsWhy only pharma field is more worried?
KEY GLOBAL PLAYERSSource : Individual company financials online 2012
GLOBAL BLOCKBUSTERS BY REVENUE&PATENT EXPIRATIONSource : Bioassociate Consulting & Management Ltd
29For Innovator companies Patent term extension Provides New drug product exclusivity 30 months stay for ANDA approvalFor Generic manufacturers Created “Abbreviated New drug Application” approvalprocess for generic versions of innovator drugsFile ANDAs with bioequivalence data using innovatorproduct180 day exclusivity for first-to-fileCertification regarding each patent listed in the OrangeBook for the product: four certification optionsHatch-Waxman Act-1984
30Paragraph IParagraph IIParagraph IVParagraph IIIPatent informationhas not been filedPatent has ExpiredPatent is invalid ornon-infringed byGeneric applicantPatent has NOT expiredbut will expire on aparticular dateFDA may approve ANDAimmediatelyFDA may approve ANDA onthe date that the patent expiresGeneric applicant provides noticeto patent holder & NDA filer;entry of the first filermay or may not occurANDA Patent certification Options
According to IMS Health, generics drugs accountedfor 57.7% of prescriptions dispensed five years ago, andclose to 75% todayPrice of the drugs will be reducedHowever, while the generic drug industry willcertainly benefit in the short term from the patent cliffGenerics will dominate the marketGENERICS ; US$ 100 Bn/paETHICAL MANUFACTURES ; US$ 720 Bn/paIt is estimated that by 2014 generic market will reachUS$124Bn.Source : IMS Health, 2012
LEADING GLOBAL GENERIC PLAYERSSource : Individual company financials 2012
INDIA has large domestic market.Highest number of US FDAApproved manufacturingUnits (74) outside the US.Clinical trial hubLess manufacturing costHigh CAGRContd..
PATENT WARSLaw suits & legal loopholes are the last resort beforea patent cliff for innovators30 Month marketing stay for brand name drugs as partof patent Infringement litigation, which providesimmunity against generics.Patent ever greening
In the end, the financial future of manypharmaceutical companies will depend on how theymanage the transition of many of their brand drugsto the generic market,as well as on their own efforts to develop noveltherapeutics and diagnostics with significant profitpotential, and to adapt to the changing globalbusiness climate.However, while the generic drug industry willcertainly benefit in the short term(upto 2015) fromthe patent cliff.CONCLUSION
AG competition typically reduces a first-filergeneric’s revenues during the 180 days of marketingexclusivity by approximately 50 percent.To prevent this loss of revenue, a generic may bewilling to delay its entry in return for a brand’sagreement not to launch an authorized generic –that is, a brand’s agreement not to compete with thegeneric through an AG – during the generic’s 180days of marketing exclusivity.
7. STRATERGIES TO MINIMIZE THE IMPACT OF PATENT CLIFFMost obviously, there has been continued investment innew drug discovery and development of a “pipeline” ofpromising agents that address unmet medical needs andare profitable.Enhanced advertising over the past decade in an attemptto optimize earnings prior to patent expiration
A number of drug companies have suggested that they willoutsource at least some of their manufacturing to placessuch as Eastern Europe, India, and China, where drugproducts can be made at significantly less. But Qualityissues will become severe.Some pharmaceutical companies already are enteringinto agreements with generic manufacturers, licensingthem the right to sell “authorized generics” identical tobranded drugs that have gone or will go off patent.
In an Economist article, it is revealed thatPfizer worked with an American firm in orderto help break apart a 180 day generic exclusivityperiod, helping the company compete with oftentimes cheaper generics. These practices havehelped to boost sales by over half a billion in thefirst half of 2012, taking at least some of the painof the patent expiration out of the equation
Companies with the biggestcash reservesNovartis $15 billionRoche $13.5 billionJohnson & Johnson $13 billionMerck & Co. $10 billionGlaxoSmithKline $9.5 billion
HYDERABAD: Dr Reddys Laboratories has agreed to buythe entire equity holding of the Dutch injectable specialtygenerics manufacturer OctoPlus NV for 27.39 million euro (192 crore) in an all-cash deal.The Hyderabad-based company said on Monday thatOctoPlus expertise in making improved injectablepharmaceuticals based on proprietary drug deliverytechnologies and focus on medicine ingredients that aredifficult to formulate complement it capabilities.Source: business-beacon.com, 2012